Forward Industries, Inc. (NASDAQ:FORD), a designer and
distributor of custom carry and protective solutions, today
announced financial results for its second fiscal quarter ended
March 31, 2011.
Fiscal 2011 Second Quarter Financial Results –
Compared to Fiscal 2010 Second Quarter:
- Net sales increased $0.6 million, or
13%, to $5.0 million in the 2011 Quarter due to higher sales of
diabetic products, which increased $0.4 million, or 11%, and higher
sales of Other Products, which increased $0.2 million, or 23%.
- Gross profit increased $0.2 million, or
16%, to $1.2 million in the 2011 Quarter primarily due to the
increase in net sales and to a lesser extent, decreases in Hong
Kong costs and freight, duties, and customs. These improvements
were offset, in part, by higher materials costs due largely to new
product launches.
- Selling expenses of $0.7 million
increased $0.1 million, or 24%, in the 2011 Quarter primarily due
to higher personnel costs, and to a lesser extent, higher promotion
and sampling costs.
- General and administrative expenses of
$1.1 million increased $0.5 million, or 99%, in the 2011 Quarter
primarily due to higher personnel costs and related travel and
entertainment expenses. To a lesser extent, higher professional
fees also contributed to the increase.
- Other income (expense) rose $74
thousand to $53 thousand of income in the 2011 Quarter due
primarily to foreign currency transaction gains compared to losses
in the 2010 Quarter, and to a lesser extent, to an increase in
interest income attributable to interest on a note receivable.
- Net loss was $0.6 million, or ($0.07)
per share, in the 2011 Quarter compared to a net loss of $0.1
million, or ($0.01) per share, in the 2010 Quarter. This resulted
from higher operating expenses (primarily general and
administrative expenses), which were offset, in part, by higher
gross profit and other income.
Fiscal 2011 Six-Month Period Financial Results – Compared
to six-month period ended March 31, 2010:
- Net sales increased $2.4 million, or
28%, to $11.0 million in the 2011 Period due to higher sales of
diabetic products, which increased $1.5 million, or 23%, and higher
sales of Other Products, which increased $0.9 million, or 45%.
- Gross profit increased $0.6 million, or
32%, to $2.5 million in the 2011 Period primarily due to the
increase in net sales and to a lesser extent, decreases in Hong
Kong costs and freight, duties, and customs. These improvements
were offset, in part, by higher materials costs.
- Selling expenses of $1.1 million
increased $0.1 million, or 11%, in the 2011 Period primarily due to
higher personnel costs, and to a lesser extent, higher promotion
and sampling costs, and postage costs.
- General and administrative expenses of
$2.0 million increased $0.8 million, or 66%, in the 2011 Period
primarily due to higher personnel costs and related travel and
entertainment expenses. To a lesser extent, higher professional
fees (incurred in connection with effort to acquire Flash Ventures,
Inc.), public costs, and office expenses also contributed to the
increase.
- Other income (expense) rose $61
thousand to $47 thousand of income in the 2011 Period due primarily
to foreign currency transaction gains compared to losses in the
2010 Period and to a lesser extent, to an increase in interest
income attributable to interest on a note receivable.
- Net loss was $0.5 million, or ($0.07)
per share, in the 2011 Period compared to a net loss of $0.3
million, or ($0.04) per share, in the 2010 Quarter. This resulted
from higher operating expenses (primarily general and
administrative expenses), which were offset, in part, by and higher
gross profit and other income.
Brett M. Johnson, Forward’s President and Chief Executive
Officer, commented: “We continue to make steady progress in
increasing our level of sales. We are particularly heartened by new
customer revenues, which speaks to broadening our customer base,
which is critical to internally generated growth. As we implement
our strategy to increase our selling capability, develop new
products, and develop a retail sales channel, we have hired
top-notch sales and operations professionals. This does not come
without cost, and it is the investment in selling, general, and
administrative expense that is, for the most part, the cause for
the operating losses in fiscal 2011 and unfavorable comparisons
with last year. We anticipate that the investment in operating
expenses will be in greater evidence for the remainder of the year
as the cost of these hires kicks in for full reporting
periods.”
Mr. Johnson continued: “We decided not to proceed with our
previously announced acquisition of Flash Ventures, Inc., as we
were unable to reach a definitive agreement on mutually acceptable
terms. However, we remain focused on leveraging our core
competencies and developing distribution channels. We are looking
carefully at technology joint ventures and acquisitions that focus
on consumer electronic accessory technologies. We will continue to
evaluate potential acquisitions when they are in your company’s
best interests.
“We believe there is significant opportunity for further
progress in Fiscal 2011 as we look to expand and diversify our
product lines, distribution channel, and customer base, with the
purpose of positioning the Company as a leader in technology
accessory offerings, and we look forward to updating you on our
progress.”
The tables below present our Fiscal 2011 second quarter results
and are derived from the Company’s unaudited, condensed
consolidated financial statements included in its Form 10-Q filed
today with the Securities and Exchange Commission. Please refer to
the Form 10-Q for complete, interim financial statements, and more
detailed information regarding the Company’s results of operations
and financial condition relating to the three and six-month periods
ended March 31, 2011, as well as the Company’s Form 10-K for the
fiscal year ended September 30, 2010, for additional
information.
Note Regarding Forward-Looking Statements
In addition to the historical information contained herein, this
news release contains forward-looking statements (within the
meaning of the Private Securities Litigation Reform Act of 1995)
that are subject to risks and uncertainties. Actual results may
differ substantially from those expressed or implied in such
forward looking statements due to a number of factors. Such risk
factors include but are not limited to those discussed in Item 2,
Part I, “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in our Quarterly Report on
Form 10-Q filed today with the SEC, as well as in “Risk Factors”
included in our Annual Report on Form 10-K for the fiscal year
ended September 30, 2010, which factors are incorporated herein by
reference.
Such risk factors include, among others: the loss of any key
customer or material sales in our Diabetic Products line, where
customer and sales concentration are high; whether important
customers reduce or discontinue inclusion of carry solutions “in
box” with their electronic products; the impact on our business and
results of operations of an acquisition or the failure to make an
acquisition; the potential lag in time between increased operating
expenses incurred to implement our growth strategy and the time we
begin to realize the benefits in increased revenue, if at all; the
concentration of our accounts receivable in a small number of
customers and our ability to collect payment; the adverse impact of
customer pricing pressures on gross margins; failure of a third
party borrower to repay us in full the principal of a note;
fluctuations in foreign currency exchange rates that could result
in increased costs or reduced revenues; levels of demand and
pricing generally for electronic devices sold by our customers for
which we supply carry solutions; the development of quality
control, delivery, or pricing issues involving our Asian suppliers;
uncertainties in the financial and credit markets; changes in,
governmental regulations; variability in order flow from our OEM
customers; a significant change in the Company’s relationship with
one or more key customers (including changes affecting their
businesses); and the loss of key sales personnel who have
significant influence on our relationships with some of our largest
customers.
About Forward Industries
Forward Industries, Inc. designs and distributes custom carrying
case solutions for hand held electronic devices. Forward’s products
can be viewed online at www.fwdinnovations.com and
www.forwardindustries.com.
FORWARD INDUSTRIES, INC.
CONSOLIDATED UNAUDITED STATEMENTS OF
OPERATIONS
Three Months Ended March 31, Six
Months Ended March 31, 2011 2010
2011 2010 Net sales $ 4,996,267 $
4,419,681 $ 10,964,474 8,546,453
Cost of goods sold
3,841,999 3,425,938 8,433,676
6,628,515
Gross profit 1,154,268
993,743 2,530,798 1,917,938
Operating expenses: Selling 662,447 533,286
1,103,437 991,558 General and administrative 1,099,591
551,414 2,011,911
1,211,535
Total operating expenses 1,762,038
1,084,700 3,115,348
2,203,093
Loss from operations (607,770
) (90,957 ) (584,550 ) (285,155 )
Other income (expense): Interest income 29,748 8,700 35,403
29,032 Other income (expense), net 23,234
(29,937 ) 11,834 (43,057 )
Total other
income (expense) 52,982 (21,237 )
47,237 (14,025 )
Net
loss $ (554,788 ) $ (112,194 ) $ (537,313 ) $ (299,180 )
Net loss per common and common equivalent share Basic and
diluted $ (0.07 ) $ (0.01 ) $ (0.07 ) $ (0.04 )
Weighted
average number of common and common equivalent shares
outstanding Basic and diluted 8,085,875
7,964,938 8,125,304 7,952,462
FORWARD INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
March 31, September 30, 2011
2010
Assets
(Unaudited) (Note 1) Current assets: Cash and
cash equivalents $ 16,292,122 $ 18,471,520 Accounts receivable, net
4,240,424 4,621,181 Inventories, net 1,167,066 1,036,386 Note
receivable 1,024,260 -- Prepaid expenses and other current assets
307,620 240,651
Total current
assets 23,031,492 24,369,738 Property and equipment, net
161,748 115,205 Other assets 52,276 46,032
Total Assets $ 23,245,516 $ 24,530,975
Liabilities and
shareholders’ equity
Current liabilities: Accounts payable $ 1,827,080 $
2,439,273 Accrued expenses and other current liabilities
601,187 885,332
Total liabilities
2,428,267 3,324,605
Commitments and contingencies Shareholders’
equity: Preferred stock, par value $0.01 per share; 4,000,000
shares authorized; no shares issued and outstanding -- -- Common
stock, par value $0.01 per share; 40,000,000 shares authorized,
8,792,296 and 8,761,629 shares issued; and 8,085,886 and 8,055,219
shares outstanding, respectively 87,923 87,616 Capital in excess of
par value 16,617,027 16,469,142 Retained earnings 5,372,356
5,909,669 Treasury stock, 706,410 shares at cost (1,260,057
) (1,260,057 )
Total shareholders’ equity
20,817,249 21,206,370
Total liabilities and
shareholders’ equity $ 23,245,516 $ 24,530,975
Forward Industries (NASDAQ:FORD)
Historical Stock Chart
From Jun 2024 to Jul 2024
Forward Industries (NASDAQ:FORD)
Historical Stock Chart
From Jul 2023 to Jul 2024